..says earnings drop reflects balance-sheet reset, not weak operations
By Sodiq Adelakun
Chairman of First HoldCo Plc, Mr Femi Otedola, has explained that the group’s sharp profit decline in 2025 was caused by a deliberate one-off impairment of ₦748 billion, taken to wipe out legacy bad loans and strengthen the bank’s balance sheet.
Otedola made the clarification in a statement shared on his X account, following concerns raised by investors after the group’s 2025 financial results showed a steep fall in profit despite solid interest income.
According to him, the decision was a strategic clean-up rather than a sign of weak business performance.
Otedola said: “At First HoldCo, we decided to clean house properly. We took a huge one-time hit of ₦748bn to admit old bad loans instead of pretending they do not exist.
“That is why profit looks like it crashed by 92%. Painful headline, but it is a serious long-term move.”
He explained that the timing of the impairment was influenced by regulatory pressure and changing expectations within the banking industry.
“The CBN is pushing banks to stop kicking problems down the road. First HoldCo closed the chapter on messy loans from past years. It sends a clear message that borrowing has consequences and helps rebuild trust,” he added.
Otedola stressed that the bank’s core business remained strong, noting that First HoldCo generated ₦2.96 trillion in interest income and ₦1.91 trillion in net interest income in 2025.
“The key point is this: our business itself is still strong. That income strength gave us the capacity to take the clean-up and remain standing,” he said.
Looking ahead, the billionaire investor said the group is better positioned for the future, especially as Nigeria’s banking sector enters a new recapitalisation phase.
“Bad loans cleared, strong income engine, long-term thinking — that is real value creation,” Otedola said, adding that First HoldCo is entering 2026 “lighter, cleaner and better prepared for sustainable growth.”
First HoldCo’s unaudited 2025 accounts showed pre-tax profit of ₦229.1 billion, down from ₦796.5 billion in 2024, while profit after tax declined by over 90%. The company’s shares closed at ₦45 on January 30, 2026, with a year-to-date loss of just over six per cent.
Otedola, who increased his stake in the group to 18.12% in 2025, remains one of First HoldCo’s largest shareholders as the bank aligns itself with the Central Bank of Nigeria’s recapitalisation reforms.